Estline sinks in sea of red ink

2001-08-09

Aleksei Gunter

TALLINN - Passenger and cargo operator E-Liini Ltd., sailing under the brand name Estline, was declared bankrupt by a Harju county court on July 24, after having accumulated over $9 million in outstanding debts.

Estline operated on the Tallinn-Stockholm route but quit doing so on Jan. 1 this year.

According to Peeter Allikvere, the appointed bankruptcy trustee, Estline's owner, the Estonian Shipping Company, is also E-Liini Ltd.'s largest creditor. Estonia's Tax Department also has the company on its list of major debtors with over 20 million kroons ($1.13 million) owed to the government.

Commenting on the assets of the debtor, Allikvere said Estline holds investments in software, which are significant but lack liquidity, and one weighty debt.

"The company owes money to employees but owes nothing to banks," said Allikvere.

Raul Markus, a lawyer at the Olevimagi law office, who's dealing with Estline's liquidation, said Estline has several other creditors aside from the Estonian Shipping Company.

"Although the debtor has some assets, it's evident that these won't be enough to cover the debts," admitted Markus.

The first meeting of E-Liini's creditors will take place on Aug. 22.

Markus said it was hard to make comments on whether anyone would try to operate under Estline's trademark. "It has a certain scent of bad luck related to the ferry Estonia's tragedy," he said, adding that the Estonia disaster was the first serious economic blow to Estline.

The ferry Estonia sank on Sept. 28, 1994, in a heavy storm while sailing from Tallinn to Stockholm near the Finnish island of Uto - 852 people died, 137 were saved. The latest version the authorities are pursuing is that the ferry Estonia sunk due to an explosion causing a hole in the ship. Previous versions considered flaws in the ship's design and the slow reaction of the crew who did not fix the problem in time.

Estline, owned by the Estonian Shipping Company, sailed the Tallinn-Stockholm route with the ferries Baltic Kristina and Regina Baltica until the end of 2000.

Hansatee Ltd., a shipping company operating under the trademark Tallink and Estline's former competitor, stays in business under favorable circumstances. Hansatee manager Kalev Jarvelill declined to comment on the matter, saying that Hansatee had no affairs with Estline and that economically the bankruptcy of Estline has no effect on Hansatee.

However, the Baltic News Service has reported that in an agreement with the Estonian Shipping Company, Hansatee took over the rental agreements of the Baltic Kristina and Regina Baltica as well as the employment contracts of about 400 Estline staff. Hansatee operates on the Stockholm route under the Tallink trademark.

Hansatee's passenger carriage volume increased considerably in July and the company served 334,971 passengers during the month.

Hansatee reported on Aug. 2 that the firm served 287,409 passengers on the Tallinn-Helsinki, 30,827 passengers on the Tallinn-Stockholm and 16,735 on the Paldiski-Kappelskar routes in July.

According to expert calculations, Hansatee's market share during July increased to nearly 51 percent as compared with 44 percent in June.

Eckero Line carried 92,504 passengers on the Tallinn-Helsinki route versus 73,170 passengers in June. Eckero's market share in July was 16.4 percent.

Nordic Jet Line's fast ships were used by 61,189 passengers in July, or 7,000 passengers more than in June. However, one of Nordic Jet's vessels was out of service for 10 days in July.

In the period January-July, the Port of Tallinn served more than 3.35 million passengers, of these 2,687,000 on the Tallinn-Helsinki and 136,000 on the Tallinn-Stockholm routes. In July, there were a total of 564,433 passengers on the Tallinn-Helsinki route compared with 488,662 passengers in June, according to port authorities.

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